iAUDIT! – In late 2024, a rather shadowy coalition of major nonprofit homelessness providers called the Greater LA Coalition on Homelessness (GLACH) managed to get LA’s City Council and the Board of Supervisors to approve substantial increases in the nightly rate for shelter beds from $66 per night to $139 night by July 1, 2025, (that’s about a 110 percent increase). As both Christopher LeGras’ All Aspect Report and one of my CityWatch columns reported, the increases were approved despite serious questions about the effectiveness of provider services and the accuracy of their statistics. Even as nonprofits’ revenues (and executive compensation) skyrocketed, many claimed they were on the verge of closing shelters unless they received new infusions of cash.
Perhaps the request for increases was related to the 2024 general election, where voters approved doubling the sales tax to fund homelessness programs, replacing Measure H with Measure A. The election was held on November 4, 2024, and less than a week later GLACH was at a City Council meeting demanding more funding. Advocates said Measure A would generate $1 billion in new revenue, much of which would go to affordable housing under the auspices of a fairly new and unknown agency called the LA County Affordable Housing Solutions Agency, (LACAHSA). As I described in an April 2025 CityWatch column, the committee guiding Measure A spending policy consists primarily of nonprofit executives and homelessness advocacy groups–the same organizations benefitting from Measure A funding.
Two things have happened since GLACH and its members got their wish. First, state and federal funding for homelessness programs has been reduced. Second, Measure A revenues will not meet projections due to a general slowdown in the economy. According to a January 14 LAist article, Measure A revenues are projected to decrease by $14.5 million in fiscal year 2025-26. Reduced funding and revenues are straining the County’s budget in different ways. First, Measure A money must now be used to partially make up for lost state and federal money. Second, 60 percent of Measure A revenue is earmarked for new housing; construction costs have been steadily increasing, thereby decreasing the rate of new construction. Finally, costs of services, such as the nightly shelter rate, have increased.
Per the LAist article, increased costs and decreased funding have led to a $219 million deficit in the County’s new Homelessness Services and Housing Department. The department’s director, Sarah Mahin and several GLACH members were quick to predict disaster unless the Board of Supervisors restores most of the funding. (Ms. Mahin comes from LAHSA, an organization that’s not a paragon of financial responsibility). A spokesperson for HOPICS, one of the large corporate providers, predicted the proposed reductions would wind up costing the County even more by shifting the costs to jails and hospitals.
Before I proceed, a side story for perspective. When I was in my graduate Public Finance class, we spent some time talking about the politics of budgeting. Among other things, we discussed the “Washington Monument Strategy”. Whenever Congress proposed cutting the National Parks budget, the Parks director would respond by saying they’d have to close the Washington Monument a few days a week. The director would threaten one of the highest profile sites in the country, and Congress would usually recoil from its budget cuts. In many public agencies, the Washington Monument Strategy became a common way to respond to proposed budget cuts by making reductions in the most painful spots possible.
We’re seeing the Washington Monument Strategy in action as nonprofits respond to the County’s proposed reductions. Affordable Housing won’t be built, services will be drastically cut, and people will be left on the street. Tellingly, providers quoted in the LAist article didn’t list specific reductions or how they would impact the unhoused population.
In large part the proposed reductions are a crisis of the providers’ own making. As I described in October 2024, many of the largest nonprofits have seen spectacular revenue increases over the past few years. Between 2019 and 2023, five large nonprofits had a 333 percent increase in cash on hand and a 92 percent increase in assets linked to buildings and land. Some nonprofits are now major landlords throughout the County. As I pointed out in the column, homelessness increased even as nonprofits revenues rose, so we cannot say there was a significant benefit to higher funding levels. Therefore, the County’s proposed reductions must be considered relative to the massive increases providers have received over the past several years.
For the moment, let’s accept the providers’ grim predictions of doom. If they are truly concerned with the impact the proposed reductions will have on the unhoused population, I have a few suggestions to make up the deficit without affecting services:
1. Claw back some of the $140 million HOPICS wasted when it botched a rental subsidy program in 2023.
2. Pull back the funding from some of the County’s housing projects that have laid vacant for years. If the housing isn’t being made available to the unhoused, its not benefiting anyone.
3. Make program funding contingent on nonprofit CEO’s agreement to take a pay cut; do they really need raises that averaged 39% over four years? Many advocate organizations are quick to condemn landlords who increase rents beyond the CPI. Perhaps CEO compensation should be tied to the CPI as well. As it is, CEO compensation averages eight to ten times the pay of field workers. If they are truly concerned about their employees and their clients, CEO’s should be willing to take a pay cut.
4. Adopt meaningful performance measures so elected officials can make informed decisions about where limited resources should go. Abandon process-based services and adopt more nimble programs that respond to the individual needs of the unhoused.
5. Reissue requests for proposals for service contracts as they expire and stop the practice of habitually renewing existing contracts with no modifications. Follow the “Breaking the Cycle” guidance from San Francisco Mayor Dan Lurie, which among other things calls for a review of the city’s “relationship with nonprofit partners to improve services and ensure accountability for delivering outcomes”.
Obviously, I don’t expect any of these suggestions to make it beyond this column. But they should give some perspective to readers and voters. Incurring a 10 percent reduction after years of double-digit increases isn’t really a reduction. Since present services have failed to show any substantial impact on homelessness, (despite leaders’ persistent storytelling to the contrary), perhaps its time for providers and elected officials to honestly reassess what benefit billions in taxpayer money have brought us so far.
(Tim Campbell is a longtime Westchester resident and veteran public servant who spent his career managing a municipal performance audit program. Drawing on decades of experience in government accountability, he brings a results-driven approach to civic oversight. In his iAUDIT! column for CityWatchLA, Campbell emphasizes outcomes over bureaucratic process, offering readers clear-eyed analyses of how local programs perform—and where they fall short. His work advocates for greater transparency, efficiency, and effectiveness in Los Angeles government.)